The three pillars of product and service value common to both lab and medical surgical products

Thinking About Value

The three pillars of product and service value common to both lab and medical surgical products.

Every experienced, successful distributor account manager I know wakes up every morning committed to sell

value rather than price. While from time to time we need to either defend our business or increase it by pitching a price story, we usually do everything in our power to avoid participating in “the race to zero.” Moreover, I know a lot of highly qualified sales managers who coach value selling every day to their teams. Additionally, we all have our favorite sales texts and every one reminds us to sell value first.

The most successful distributor account managers I know establish their personal supply chain value around three elements: ʯ Personal value (how I help you) ʯ Company value (how my company invests in your success) ʯ Product value (why this product makes sense for you and why I recommend you consider it in your practice/business)

As many conversations about value that I have been in, while most of them have been good and captured the customer’s imagination, I must say they are not always as consistent as I think they can be, and sometimes they miss a high point or two.

When that happens, we leave the customer’s office and have that “I wish I had said that” moment on the way out. In this column I plan to discuss the three pillars of product and service value common to both lab and medical surgical products. I intend to give you some food for thought in your pre-call planning efforts and help you to become more consistent and successful. What are the three pillars of product and service value for lab and med/surg products? And, are we sure there are only three? Well, after a few decades of giving and listening to countless sales presentations, while others may come up with a different count, here are my three: ʯ Clinical value: impact on patient care outcomes; improvements in morbidity and mortality ʯ Economic value: positive impact on BOTH the profit and loss and balance statements ʯ Workflow value: How can the customer be more efficient? How can they use human resources more effectively? How can they positively impact job satisfaction in the workplace?

Let’s take each element of value individually and see if we can agree on how they are all part of a successful presentation and, more importantly, how they contribute to the sale and a positive customer experience.

As quarterback for the sale, it’s not your job to know all the clinical detail, but it is your job to know who does, when you need them and when to bring their expertise to bear.

Pillar No. 1: Clinical value

Especially in the lab business, positioning clinical value almost seems intuitively obvious. Since we tend to have conversations with clinicians, it seems the most obvious element of value. Fundamentally, clinical value answers the question: does this product or service improve patient healthcare outcomes? Clinical value must be anchored in credible data, often peer reviewed information. At the same time, clinical value must overcome inertia: is it too new to be consider proven, safe and effective? Can the customer be convinced the clinical value is sufficient to overcome start up, training or switchover costs? How much time will it take to implement?

As quarterback for the sale, it’s not your job to know all the clinical detail, but it is your job to know who does, when you need them and when to bring their expertise to bear. That takes a lot of skill. Clinical value certainly is important to the clinical and user buyers, but the financial buyer may often argue: “Well it sounds like good medicine,

but can we afford it?” Know who has the power and leverage at your key customers and just how much focus to put on this element of value.

Pillar No. 2: Economic value

Did someone say lowest price? Is that economic value? No. Make that lowest lifetime cost, best use of assets, effective leverage to the P&L and a healthy balance sheet. Know every element of economic value, with discussions of lifetime costs and the delicate balance of startup, switching and training costs versus revenue as absolutely essential for large scale lab and other capital equipment deals. Lowest initial price may look like value, but the true measure of economic value is its overall contribution to both the P&L (making a profit) and the balance sheet (effective use of assets).

Again, this is the place where the experienced distribution professional understands the needs and probable questions of their key customers and properly and thoroughly coaches and prepares their financial/supplier partner to establish economic value. Expect to be asked about switching costs, how to effectively retire the current asset, effective life of the new asset and any expensive ancillary software and services required to bring the new asset on line effectively. It’s not over until the customer agrees that the product has been properly installed, trained and is performing to expectations you and your key supplier set.

With patient portals and virtual visits growing in importance and popularity rapidly, workflow value is taking on new importance.

Pillar No. 3: Workflow value

There are several key considerations here. Can the solution better leverage experience and expertise of the customer’s team (using lower cost/skill labor to deliver the same or better quality result)? Can results be delivered faster, through more effective means of communication to practice staff and patients? Can new procedures be implemented based on improvements in technology (which can also drive the other two elements of value). If higher skill staff is able to be freed from the current process or procedure, what higher value tasks can they perform? Can the practice provide new, innovative services? Are there new ways to communicate to patients?

With patient portals and virtual visits growing in importance and popularity rapidly, workflow value is taking on new importance. What once was a story of “we can reduce lab test turnaround time by 15 minutes” has become a far bigger story on how the practice can benefit in scheduling patient visits, providing services, communicating the results of them and managing and maintaining the information to inform future patient decisions regarding treatment programs more efficiently.

If it’s true that value is in the eye of the beholder, it’s up to you to make sure you consistently tell a comprehensive value story on every customer visit knowing which element of value is most important to each buying influence. More value adds up to a larger business for you and greater customer satisfaction and loyalty.